Arms sales drop for first time since 1990s

Sales by 100 biggest weapons makers fell by five percent compared to last year, according to new think-tank report.

Austerity measures, the end of the Iraq war, and the troop pullout in Afghanistan pushed down sales [Reuters]

The world's largest arms manufacturers are expanding their cybersecurity businesses as sales of traditional weapons slump for the first time in decades.

Arms sales by the 100 biggest weapons makers fell for the first time since the mid-1990s in 2011 as economies slowed and purchases of equipment were reduced, the Stockholm International Peace Research Institute (SIPRI) said on Monday.

The end of the US war in Iraq, and the ongoing drawdown in Afghanistan, also pushed down sales, which ammounted to $410bn last year, a five percent drop [adjusted for inflation] from 2010.

SIPRI, which has been compiling the list since 1989, does not include Chinese-based firms due to a lack of available data.

"Austerity policies and proposed and actual decreases in military expenditure as well as postponements in weapons programme procurement affected overall arms sales in North America and Western Europe," it said in a statement.

"The drawdowns in Iraq and Afghanistan and the sanctions on arms transfers to Libya also played a role."

US and Europe leaders

Spending fell for the first time since the mid-1990s, when defence spending was falling after the Cold War, Susan Jackson, a researcher at SIPRI, said.

Sales growth had already slowed in 2010, to 1 percent from 8 percent in 2009, as the withdrawal of foreign troops from Iraq held back demand.

Of the firms monitored by the group in 2011, 74 were based in the US and western Europe, generating 90 percent of the sales, roughly unchanged from 2010.

The top spots were little changed from 2010 with US firm Lockheed Martin still the biggest, with $36.3bn in sales. Boeing placed second, with $31.8bn in sales, followed by British BAE Systems with $29.1bn.

SIPRI said a strong recent trend among big arms makers was diversification into cyber-security - protecting computers and networks against intrusions and attacks - as public spending in this area remained a privileged area in Western countries despite budget austerity.

"Cyber-security has become a top national security issue and there has been a lot of discussion about that over the last years," Vincent Boulanin, a cyber-security expert at SIPRI, said.